According to Keynesians, for Monetary Policy to Have a Stimulative

question 38

Multiple Choice

According to Keynesians, for monetary policy to have a stimulative effect on GDP, a(n) :

• A) increase in the money supply lowers the interest rate in order to stimulate higher levels of investment.
• B) increase in the money supply lowers the interest rate in order to lower levels of investment.
• C) decrease in the money supply lowers interest rate in order to stimulate higher levels of investment
• D) decrease in the money supply causes the interest rate to rise in order to stimulate higher levels of investment.
• E) increase in the money supply causes the interest rate to rise in order to stimulate higher levels of investment.

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